Outside Business Activities (OBAs)

What this video covers

• The precise definition of an outside business activity (OBA): any business activity a registered person performs outside the scope of their relationship with their member firm
• Why the requirement is prior written notice, not prior written approval, and what violates the rule even when the firm would have said yes
• The three possible firm responses after receiving notice: approval, denial, or restriction with specific limitations
• Why serving on a board of directors requires prior written notice regardless of whether the role is compensated or unpaid
• Which activities are exempt from the OBA notice requirement, specifically passive investments such as rental property ownership or personal stock purchases
• How to distinguish an OBA from a private securities transaction, and why the latter requires actual firm approval when compensation is involved
• The supervision obligation that attaches when a firm approves a private securities transaction, treating it as the firm's own business